Police on overnight patrol in Manchester. Photograph: London News Pictures/Rex Features

Midnight in Manchester and there are shouts as a group of lads close to the Printworks face off. Perhaps the police might have waded in, but here on Thorniley Brow, no police are to be seen.

Thorniley Brow lies among the Manchester streets last week described as "too dangerous" to go out in after midnight by Inspector Ian Hanson of the city's police. Here, the concept of 24-hour drinking, the attempt to import a continental-style "café culture", is said to have compromised public safety, provoking calls for Manchester's liberal licensing regime to be tempered.

Each Friday and Saturday night, 250,000 drinkers spill into the streets between the river Irwell and A665. Wedged into a zone barely 15 square km are more than 500 bars, pubs or clubs. Every weekend sees at least one new arrival joining the fastest-growing night-time economy outside London.

By 10pm on Friday, the economy is in rude health, with large groups assembling outside the pubs along Deansgate. The Moon Under Water is heaving. Despite the drizzle of a Mancunian summer, crowds line the strip of bars along Thomas Street in the Northern Quarter.

Inspector Hanson sparked a furious debate last week when he told the Manchester Evening News: "I personally would not now go into Manchester city centre after midnight because it is now too dangerous a place and I do not believe that we can guarantee individuals' safety. Our politicians now need to listen to and get behind police leaders to do what they are elected to do – keep the people of Manchester safe."

Everyone has heard Hanson's comments, few agree. Down at the Liquorice bar on Pall Mall, Tanya Jackson, a 34-year-old shop assistant from Chorlton, says: "I've never seen one fight in all my time going out." Her friend Gill Berry, 32, a bank employee from Carlisle, says: "I've staggered home at 6am and never had any bother."

A doorman at the Northern Quarter's latest bar, the Cain and Grain, enjoying its second night trading, says: "I've worked in Manchester for a year and personally don't think it's too bad, there's enough police but then you always want more. And there's always one idiot."

He cites a 3am unprovoked attack last Sunday that had left a friend in hospital with a fractured skull.

It is approaching midnight, the start of Hanson's "danger zone". A 45-minute walk through the Northern Quarter, beside the Printworks to Oxford Road via Deansgate, and not an officer is to be seen. As few as four police are on duty after 4am, according to the city's police federation. And the force has £66m to shave from its budget, which could mean losing 700 of its 6,900 officers.

In short, the post-industrial reinvention of Manchester is threatening to outpace its public coffers. And the question of who will pay to police the new night-time economy is part of a broader debate about how the great northern cities should be governed. On Tuesday Labour promised to devolve power to help regional metropolises become "economic powerhouses". Manchester's police force and council, meanwhile, have joined forces to accuse the government of persecuting their city.

A joint statement from senior figures has condemned the coalition's cuts as "unfair", leaving "the police in what can be a difficult position when it comes to meeting priorities".

Senior police recently urged the council to stop all licensed premises serving after 3am. The council refused. Plans for a 6p-a-pint late-night levy to fund security have been abandoned.

On Friday the police unveiled their latest initiative on alcohol-related incidents. Greater Manchester police said it would allow people caught being drunk and disorderly to pay £45 and attend a three-hour counselling course instead of the £90 fine. Counselling sessions include a review of drinking habits to avoid "high-risk situations".

Back inside the vast Printworks complex, the issue of whether Manchester's late-night streets are "high-risk" remains hotly disputed. A doorman at the rowdy Bierkeller, 1,400 capacity and already looking busy, said: "One night it's packed and all is fine, then you get a quiet night and it's madness." The Printworks has door staff as well as venue security and, after midnight, expects two officers on patrol. "But when you need them they're never there," said the doorman.

In Chinatown, where details emerged last week of how a scientist was stamped on in a late-night unprovoked attack, student Andy Bowman, 20, says: "You'd have to be very unlucky to be punched."

A tramp opposite Rosso restaurant who has spent more than 25 years on Manchester's streets says: "It's a student city – the problems are on the estates plus there are loads of undercover police about because of the students."

When asked how he ended up in a wheelchair, he says: "I got jumped, but it doesn't happen often."A bouncer at the nearby Room cocktail bar says he is so relaxed that he reads his Kindle on the door.

Yet on the political front it has turned ugly. Hanson's descriptions of "hordes of drunks" against whom officers are "fighting a losing battle" have riled many. Both the deputy leader of the city council, Bernard Priest, and Chief Superintendent Nick Adderley, castigate the comments as "misleading … simply wrong".

Phil Burke of Manchester's Pub and Club Network said: "The city is as safe as it ever has been, if not safer."

Some statistics corroborate their assertion. Police say that the number of violent crimes in the city centre dropped almost a fifth over the past two years, while public order offences fell almost a third. Yet crimes against the person have almost trebled in Manchester since 2009, from 521 then to 1,469 in 2014.

The correlation between drinking and violence is undisputed. Manchester's NHS alcohol strategy reveals "more than a fifth of all violent crime happened between 11pm and 4am on either Friday into Saturday or Saturday into Sunday".

Past midnight and into the early hours of Saturday morning, there is no tangible upsurge in threat and no sign of the revelry abating. Near the Black Dog Ballroom, Church Street, illustrator 27 Andy Robinson says: "I've drunk in London, all over, but Manchester's the friendliest and safest. Have you ever drunk in Preston? Now that's dangerous."